How does the financial and operational performance of your business compare to similar sized companies in your industry? What areas in your business are you better/worse than your peers? What are the current trends in your industry? If you don’t know the answer to the questions mentioned above, your business would more than likely benefit from industry benchmarking.
What is industry benchmarking?
Benchmarking is the process of comparison and measurement against a standard. Industry benchmarking allows for the evaluation of your business’s financial and operational performance in relation to a specific group of companies of similar size and scope operating in your industry (peers).
Benchmarking against your peers will gain you insight as to what your business’s competitive position is, how its income/expenses stack up to competitors, how its financial ratios compare to others in the industry, and where your greatest strengths/weaknesses as a company lie. All of these cumulate to empower you to find areas of potential improvement opportunities, increase efficiency, correct weaknesses, and as a result improve the overall financial/operating performance of your business.
Is industry benchmarking worth the time and investment?
Industry benchmarking reports can act as a roadmap to the best opportunities to improve your financial performance, avoid pitfalls, and grow your business. DS+B collaborates with our clients to use the information from the industry benchmarking report and help them implement changes in their business. As a result, they have seen significant positive returns stemming from the change.
Mistakes and inefficiencies are inevitable in any business (and in life); however, if you can learn from the failures of your peers, rather than your own, I believe the return on investment can be great.
There is a Zen Proverb that states “It takes a wise person to learn from their mistakes, but an even wiser person to learn from the mistakes of others”.
Is industry benchmarking a difficult process?
There are many industry standard numbers to be found from numerous locations; however, the trouble and time consuming portion stems from sifting through the overabundance of information.
At DS+B, we have access to powerful industry benchmarking tools that, in a timely fashion, we can use to compile a comprehensive industry benchmarking report. This report will give you the data that you need to make informed decisions that can have a positive effect on your business.
Disclaimer: All content provided in this article is for informational purposes only, and is subject to change. Contact a DS+B professional before using or acting on any information provided in this article